Sales jobs are jobs in which an employee works to persuade a customer or client to purchase their company’s products or services. Sales can occur at various levels, from customer sales to business-to-business or business-to-government sales.
Some examples of sales jobs include:
- Sale of cars or other motor vehicles;
- Real estate sales;
- Retail sales of products such as merchandise, toys, and other retail stock;
- Sales of services, such as a cable service, maintenance services, and other types of services;
- Large volume sales of equipment or supplies for a business;
- Sales to supply government agencies.
All businesses have to sell their products and services through some manner of marketing. Many businesses use sales people to do this work. In many cases, a company will hire an entire department that is dedicated to the sale and promotion of its products or services. Payment for sales agents often depends on terms that are negotiated and are documented in an employment contract.
Many salespeople work on a commission basis. This means that they are paid a percentage of the value of sales that they conclude successfully. Or, they may be paid a combination of a commission and a salary. Their work may also entail frequent travel to meet with potential customers at their places of business.
Usually, the employer reimburses the salesperson for their travel expenses. Contract issues can arise if an employer does not pay the commission owed or provide full payment to reimburse travel expenses. A salesperson who has not been paid what they are owed would have to file a breach of contract lawsuit, if they cannot negotiate a resolution of the issue with their employer.
What Are Some Legal Issues Associated with Sales Jobs?
Sales jobs are often associated with very specific legal issues, including:
- Illegal Tactics: A salesperson might use fraudulent misrepresentation, threats of force or other unfair or illegal tactics usually to sell project contracts or large supply contracts;
- Insider Trading: A salesperson might engage in “insider trading” and other illegal practices. For example, a salesperson who wins a large contract to supply another company might pass this information to friends and family members. They can then buy stock in the company in anticipation of the fact that the large contract will improve its fortunes;
- Counterfeit Goods: A salesperson might deal in items that are counterfeit and violate trademark or copyright law;
- Stolen Goods: A salesperson might sell property that has been stolen;
- Breach of Sales Contracts. The company selling a product or service may not perform as promised in the sales contract either in terms of the product delivered or the timing of deliveries. This could lead the buyer to have to sue for breach of contract;
- Kickbacks and Bribes: A salesperson might engage in the illegal payment of kickbacks and bribes in order to get sales;
- Breach of Employment Contracts: A company might not pay their sales employees the commissions and reimbursement for expenses that they are owed, as mentioned above.
There are also many different state and federal laws that govern sales practices and methods. These can differ according to state and according to the types of goods or services being sold. The law often deals with sales to government agencies and preventing corruption in connection with government operations.
For example, a salesperson trying to get contracts for the business which they represent may become involved in paying kickbacks to win contracts. Kickbacks can be paid in different ways, but they all involve some type of collusion between two parties.
For example, the bookkeeper for a business or government agency might authorize payment of an invoice for a shipment of a product. The bookkeeper may know, however, that the bill is inflated because it does not reflect the true price or the true quantity of product that was purchased. A higher amount has been charged than what is really owed.
The seller of the goods might then pay the bookkeeper part of the difference between the true price and the inflated price that is paid by the company. Kickback schemes can be difficult to detect and investigate.
In another example, a government employee responsible for evaluating proposals from contractors to build an infrastructure project might receive a kickback from one of the contractors in exchange for awarding the project to that contractor rather than another who might have submitted a lower bid. This may result in a lowest priced bid not winning the project as it should under law.
Contracts for procuring products may involve kickback schemes. For example, contractors competing for a government contract to supply an agency with office equipment must compete to be selected. Generally, they need to submit the lowest bid. Rather than submitting a winning bid, a contractor might reach out to the agency’s procurement officer and suggest that, if the contractor were to win, the officer would be rewarded. The reward might be the payment of cash, a gift of concert tickets, or other types of financial favors.
Under the federal Anti-kickback Statute (AS) a person may not intentionally offer to pay, pay, solicit or receive anything of value to induce or reward referrals for business concerning federal healthcare programs. Payment of referral fees are acceptable in some industries, but not in the healthcare industry. The payment of referral fees in the healthcare industry is a crime.
The prohibition of kickbacks applies to those who pay for referrals as well as those who receive them. Kickbacks can take various forms, for example, they can take the form of cash payments or gifts of goods or services.
There are criminal and civil penalties for violating the AS, which is a felony. Punishment comprises a fine of up to $25,000 per violation, and as much as 5 years in prison or both.
There are civil and administrative penalties as well. A perpetrator can be liable to pay money damages under the federal False Claims Act (FCA). The False Claims Act provides the federal government with a means to recover money it has lost from the payment of referral fees. The government can file a lawsuit in federal court against a person who has submitted false or fraudulent claims to the government. A perpetrator can be penalized up to three times the value of the loss to the government program that was affected, plus $11,000 per claim.
In addition, a person who pays kickbacks can be excluded from future participation in the relevant program.
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Bribery is yet another crime that might take place in the context of sales and the pursuit of lucrative sales or project contracts. Bribery takes place when a person offers something of value to a corporate or public official in order to win their cooperation in influencing a decision-making process, committing or allowing fraud against the official’s organization, or otherwise not performing their official duties honestly as required by law.
Federal law prohibits bribing federal public officials. There is, however, no federal law that prohibits bribery in the private sector. The employees of a private employer who engage in bribery may be charged with the crime of honest services fraud. The federal mail and wire fraud statute defines this crime.
This statute makes it a crime to perpetrate fraudulent schemes that deprive another person of honest services through bribes or kickbacks from a cooperating third party. A person convicted of honest services fraud faces up to 20 years in prison and a fine of up to $250,000.
What Are Some Remedies for Sales Job Violations?
In most cases, a monetary damages award may result in lawsuits that claim some sort of loss due to sales tactics that violate civil or criminal law. An award of money damages compensates a company for economic losses they have experienced because of a violation.
In some cases, other remedies may be available instead of or in addition to money damages. For instance, a public agency with law enforcement authority may order an investigation of a company in order to discover whether there have been other civil or criminal violations within the company, especially if a government agency is involved. Remedies of course will depend on the state or federal laws at issue as well as the type of violation.
Do I Need a Lawyer for Help with a Sales Job Lawsuit?
Sales jobs can potentially involve a wide and diverse range of legal issues. You may want to consult a qualified contracts lawyer if you need help with a dispute that involves either an employment contract or a sales contract. In addition you may wish to have the help of a contracts lawyer if you need legal expertise in negotiating an employment contract or sales agreement.
If you have been charged with a crime in connection with participation in a kickback or bribery scheme, you want to consult a criminal defense lawyer. They are the ones with the expertise needed to deal with the criminal justice system.
